external audits: Missing expenditures were eight percentage points lower in villages subject to external monitoring. The results were less impressive for grassroots monitoring. While community members did participate in the accountability meetings in higher numbers in villages where special mobilization efforts were undertaken and they did discuss corruptionrelated problems (and even took action at times), no significant reductions in the level of corruption were observed. If one had relied on only the output measures or observation that characterizes many USAID M&E efforts (e.g., number of participants in community events supported by USAID programs), it might have mistakenly been concluded from the level of community participation that grassroots monitoring was making a substantial difference. But Olken’s more careful methodology led him to the opposite conclusion. While there are undoubtedly benefits to mobilizing community participation for a variety of other purposes, it appears that if the goal is to reduce local corruption, supporting more external audits is considerably more effective.

Another example is the question of how best to promote a robust and vibrant civil society. USAID regularly makes substantial investments in civil society organizations (CSOs) and local NGOs with the hope of empowering the disadvantaged, building trust, enhancing cooperation, and supporting the flourishing of democratic institutions (Putnam 1993, 2000). Yet some skeptics have warned that outside support for CSOs might be counterproductive: It may produce more professionally run organizations that no longer have strong ties to their grassroots base (Skocpol 2003) and may actually change the leadership of such organizations, disempowering the disadvantaged (Igoe 2003). Knowing whether outside assistance helps or harms CSOs is a question of vital importance, and randomized evaluations have begun to offer some preliminary evidence.

Gugerty and Kremer (2006) conducted a randomized evaluation in which a sample of women’s self-help associations in rural Western Kenya were randomly selected to receive a package of assistance that included organizational and management training as well as a set of valuable agricultural inputs such as tools, seeds, and fertilizer. Forty groups received assistance in the first year, while an additional 40 eligible groups served as the control group (although they were given the same assistance, just two years later). The results are disturbing for advocates of outside funding to community groups. While members of the funded groups reported higher levels of satisfaction with their group leadership, there is little evidence that objective measures of group activity improved. Moreover, Gugerty and Kremer found that outside funding changed the nature of the group and its leadership. Younger, more educated women and women from the formal sector increasingly joined the group, and these new entrants tended to assume leadership positions and to displace older women.

IMPROVING DEMOCRACY ASSISTANCE Compared to their unfunded counterparts, funded groups experienced a two-thirds increase in the exit rate of older women—a troubling finding given the program’s underlying objective of empowering the disempowered. Whereas an analysis of group members’ satisfaction would have led project evaluators to conclude that the project was a success, the careful randomized design led Gugerty and Kremer to the opposite conclusion (and generated significant evidence that the skeptics may be right about the sometimes counterproductive impact of donor funding to CSOs).

These two examples serve to support a broader point: It is both possible and important to conduct randomized impact evaluations of projects designed to support DG. In both cases the randomized evaluations effectively measured a project’s impact, but they also provided new evidence about implicit hypotheses that guide programming more broadly. In the case of corruption, the implicit hypothesis was that community empowerment is an antidote to local-level corruption; in the case of civil society support, the hypothesis was that donors can spur the growth of a vibrant civil society that empowers the disadvantaged through outside support.

The evidence casts some doubt on both hypotheses and should encourage further evaluations to see if these results hold more broadly and perhaps fuel the search for alternative methods to support DG goals.

The larger point, however, is not so much the findings of these studies as the fact that they were successfully conducted on DG projects. The next chapter describes the findings of the committee’s field studies and discusses how these designs could be applied to the evaluation of several of USAID’s own current DG projects. It also explicitly addresses some of the common objections to using randomized evaluations more widely.

Gugerty, M.K., and Kremer, M. 2006. Outside Funding and the Dynamics of Participation in Community Associations. Background Paper. Washington, DC: World Bank. Available at http://siteresources.worldbank.org/INTPA/Resources/Training-Materials/OutsideFunding.

Miron, J.A. 1994. Empirical Methodology in Macroeconomics: Explaining the Success of Friedman and Schwartz’s “A Monetary History of the United States, 1867-1960.” Journal of Monetary Economics 34:17-25.

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